2012/06/29 EWG Meeting minutes

2012/06/29 EWG Meeting minutes

Ellena, Mike, Tim, Chris F-D, Mark W, Dave, Tom L, Mark B, Peter, Liam, Clive
1. Minutes from last meeting approved
2. Recreate the GIRO bank – Mike suggested using our contacts to create a proposal – eg..
unions, Occupy, Sir John Gieves. With all the furore over LIBOR manipulation, the time is
right to make a proposal to create a people’s banking network using PO branches. The
original GIRO bank was based on a continental system which worked well.
3. Agenda for GA this evening. The original outline with Mike raising the issue of GIRO bank.
Tim will confirm detail after GA process meeting
4. Tom’s banking paper – i) Simplicity of rules. Mention of Baker Bill – personal bonds lodged
by directors and to be held liable for 10 years after loss of tenure; ii) Competition is not
necessarily a good thing – but field should be open to new entrants; competition is fine for
service but not for structural activities (increasing risk); needs proviso for adequate ethical
standards; iii) investment banking conducted only on a partnership basis; iv) limiting
interbank lending – derivatives and reserves implications need to be considered; v) cyclical
calibration of regulations and capital requirements would be subverted by the banks – under
the old system it worked counter cyclically but under political control – macro prudential
regulation – given away control of the levers of monetary policy – Brown’s decision was
political to ingratiate with city – needs rethink; vi) investment banking ring fencing wouldn’t
bring it down to size on its own – M&A is an area that shouldn’t be banking business.
Shadow banking has symbiotic relationship with mainstream banking – cut down banking
and hedge funds will shrink; ranking of activities in order of desirability or utility and
remove the lower ranking activities; banks are vulnerable and now is the time to strike; vii)
trading on exchanges – subject to regular approval; viii) OTC trades only with legitimate
counter-parties; combine with viii) and ix); x) exchange controls – international cooperation
required; unique protection of our banking system -national/people’s interests held to
ransom; how does it link with the idea of an international trade currency?; would close down
regulatory arbitrage and tax havens. xi) Andy Haldane – wider variety of ownership models
for banks; those with a financial stake needs to be defined; mutuals only one share per
depositor irrespective of size of depositors; John Lewis model?; going in the right direction
– weighting of ownership/influence to be determined; xii) reimbursement of government
subsidy? This and other items postponed – next meeting Friends Meeting House. Defining
banking to be on the Agenda.